Welcome to the Leicester Bangs Blog - check regularly for arts and music news, occasional previews and lots of reviews.
Find out what's on at Leicester's Musician Venue with our daily update, and follow us on Twitter @LeicesterBangs

Monday, 24 September 2012

EMI-Universal deal cleared by EU and US regulators

EU and US regulators have approved the takeover of UK
music firm EMI by Universal Music, but it must sell some of the firm's most
valuable labels.

The European
Commission said Universal would have to sell off assets including the
Parlophone label, home to artists such as Pink Floyd and Kylie Minogue.

The US Federal
Trade Commission later approved the deal in its turn without imposing any
conditions.

The £1.2bn
($1.9bn) takeover of EMI was announced in November.

Although the
European Commission said its ruling would allay competition fears, rival music
labels have condemned the move.

EMI, with a
history dating back to 1897, is home to artists including the Beatles and Pink
Floyd. Universal is a unit of French media giant Vivendi.

The
Commission's demand for assets sales also includes disposal of EMI's Chrysalis,
Mute, and Classics labels, as well as Universal's Sanctuary and Co-op Music
labels.

"The very
significant commitments proposed by Universal will ensure that competition in
the music industry is preserved and that European consumers continue to enjoy
all its benefits," EU competition commissioner Joaquin Almunia said in a
statement.

'Preserve choice'

He said a combined
group would have a market share with the European Union of less than 40%, the
threshold which typically prompts regulators worry about market dominance.

Mr Almunia
said: "Competition in the music business is crucial to preserve choice,
cultural diversity and innovation.

"In this
investigation, we have paid close attention to digital innovation, which is
changing the way that people listen to music."

Citigroup is
selling EMI, having bought it when buyout firm Terra Firma defaulted on loans
owed to the US investment bank. Regulators have already allowed a group led by
Sony to buy EMI's music publishing arm for $2.2bn.

Universal
welcomed the commission's decision, saying: "Today's approval brings to an
end an extensive EU regulatory review and the acquisition will benefit the
artistic community and music industry."

The company
said that after the asset sales, its catalogue would include the Beatles, Beach
Boys, Genesis, Katy Perry, Emeli Sande and Robbie Williams. The Beatles, part
of Parlophone, was exempted from the sale.

A source close
to Universal said the company had already received interest in the assets for
sale from well-funded potential buyers.

'Universal's
arrogance'

Smaller rival
music labels reacted angrily to the commission's decision. Impala, which
represents independent label across Europe, claimed that the commission's
conclusions acknowledged that "Universal's power is a problem across the
whole market".

Helen Smith,
executive chair of Impala, said: "This decision has finally put a freeze
on Universal's ability to expand further and sets a benchmark for constraining
abusive behaviour across the whole market.

"Following
the approval of the Sony/EMI merger, however, this decision nonetheless
reinforces what is already a powerful duopoly. Contrary to the basic principles
of competition in cultural markets, artists and consumers will ultimately pay
the price."

Martin Mills,
chairman of Beggars Group, said: "It's good to see that the Commission has
seen this deal as such a threat to the market that it has demanded and received
truly swingeing commitments to divestments.

"However,
that should not conceal that fact that Universal's arrogance has paid off for
them, that they have destroyed a significant competitor, and that even with
these divestments their ability to dominate and control the market has reached
even more unacceptable levels.

"Anyone
trying to start a new digital service will be realising that very soon, and we
will continue to look to the regulators to monitor ongoing behaviour."